The U.S. Court of Appeals for the D.C. Circuit on Dec. 20 revoked the Federal Energy Regulatory Commission license renewal for Conowingo Dam in Maryland, saying the agency ran afoul of federal environmental law in approving it based on a settlement between the state and Baltimore-based dam owner Constellation Energy Corp. 

Writing for the court, Senior Judge David S. Tatel said FERC’s approval of a new 50-year license based on an arrangement reached between Maryland and Exelon, part of Constellation Energy until 2022, exceeded agency authority under the U.S. Clean Water Act. “FERC had no statutory authority to issue the license under review,” he wrote. “Vacating the license … will allow completion of administrative and judicial review that was interrupted by the settlement agreement.” 

Under the act, FERC may issue a dam license only if the state where the dam is located either certifies the waterbody near the dam will meet water quality standards, or it issues a waiver for failing to take action. 

The federal appeals court said Maryland had indeed been involved in the water quality certification process, and therefore could not retroactively issue a waiver. The state Dept. of the Environment issued the waiver in 2019 as part of settlement negotiations with Exelon. The energy company contested the state’s 2018 certification, which was conditioned on the dam owner agreeing to develop a plan to build several nutrient reduction and other environmental projects to protect water quality in the Chesapeake Bay. 

Environmental groups are cheering the appeals court decision. They say it will enable Maryland to force Constellation to implement more projects to improve water quality in the Susquehanna River, the bay’s primary tributary. The river has become increasingly polluted as the reservoir behind the Conowingo, located five miles south of the Pennsylvania border, has filled up and discharged trapped sediment and nutrients during storm events, according to the Chesapeake Bay Foundation, which legally challenged the settlement agreement along with Waterkeepers Chesapeake. 

“Maryland’s sweetheart deal with Constellation left the utility off the hook for what would have been decades of pollution related to the dam’s operations,” said Alison Prost, foundation vice president of environmental protection and restoration, in a statement. The court decision is an opportunity to require more upstream environmental projects to offset discharges of pollutants from the dam, she said.   

A spokesman for Maryland said in an email the state is “disappointed” by the court ruling and still considering options.  

But Constellation Energy says the decision could jeopardize $700 million in environmental projects, including $225 million committed to as part of the settlement with Maryland, as well as up to $300 million for projects to enable better fish passage as part of a settlement with the U.S. Fish and Wildlife Service, and $175 million related to FERC requirements for recreational facilities and protections for rare, threatened and endangered species. 

“While we are still reviewing the order, we are surprised and disappointed in the D.C. court’s decision to vacate Conowingo’s license renewal," said Paul Adams, a Constellation spokesman, in a statement. "No one who cares about clean air and the health of the Chesapeake Bay should be cheering this decision, which potentially jeopardizes the state’s largest source of renewable energy and could disrupt up to $700 million that Constellation pledged for environmental programs, projects and other payments that directly benefit water quality, aquatic life and citizens living on and near the bay.”